Narrative monetary policy surprises and the media

In the new CAMP working paper 06/2019, ter Ellen, Larsen and Thorsrud use textual data to identify “narrative monetary policy surprises”, defined as the change in economic media coverage explained by central bank communication accompanying interest rate meetings. Their identification scheme and data provide narrative surprise measures that are uncorrelated with conventional monetary policy surprises, and that have a significant effect on subsequent media coverage. Their study highlights the importance of central bank communication and the role of the media as information intermediaries.

The paper contributes to a growing literature emphasizing the role of media as information intermediaries in economics.  The Financial News Index (FNI), constructed at CAMP, is one practical output of such research. Read more about the index on our website or in the blog archive.


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